Marketing Research
Cost-Conscious Marketing Research by Alan R. Andreasen
Many small businesses and nonprofit organizations assiduously avoid more than a cursory flirtation with marketing research because they misunderstand what it is and what it can accomplish. Five misconceptions often dominate managers’ thinking about it: 1. The “big decision” myth. You turn to marketing research only when you have a major decision to make; otherwise it has little to do with the details of day-to-day decision making. 2. The “survey myopia” myth. With its random samples, questionnaires, computer printouts, and statistical analyses, marketing research is synonymous with field survey research. 3. The “big bucks” myth. Marketing research is so expensive that it can only be used by the wealthiest organizations, and then only for their major decisions. 4. The “sophisticated researcher” myth. Since research involves complex and advanced technology, only trained experts can and should pursue it. 5. The “most research is not read” myth. A very high proportion of marketing research is irrelevant to managers or simply confirms what they already know. Often the research is so poorly designed and written up or so esoteric that it simply ends up in the bottom drawer. In this article I consider each of the myths and show why they are misleading. Then I suggest several approaches to low-cost research. The “Big Decision” Myth Too often, marketing research is deemed necessary only for decisions involving large financial stakes and in such cases should always be carried out. But research should be viewed from a cost-benefit perspective. Its costs are usually of two types—the expenses for the research itself and the amount of lost sales and lost competitive advantage caused by delaying a decision until the results are in. The benefits result from improving the quality of decisions under consideration. Any improvement, in turn, is a function of the stakes involved and how uncertain you are about the rightness of
Many small businesses and nonprofit organizations assiduously avoid more than a cursory flirtation with marketing research because they misunderstand what it is and what it can accomplish. Five misconceptions often dominate managers’ thinking about it: 1. The “big decision” myth. You turn to marketing research only when you have a major decision to make; otherwise it has little to do with the details of day-to-day decision making. 2. The “survey myopia” myth. With its random samples, questionnaires, computer printouts, and statistical analyses, marketing research is synonymous with field survey research. 3. The “big bucks” myth. Marketing research is so expensive that it can only be used by the wealthiest organizations, and then only for their major decisions. 4. The “sophisticated researcher” myth. Since research involves complex and advanced technology, only trained experts can and should pursue it. 5. The “most research is not read” myth. A very high proportion of marketing research is irrelevant to managers or simply confirms what they already know. Often the research is so poorly designed and written up or so esoteric that it simply ends up in the bottom drawer. In this article I consider each of the myths and show why they are misleading. Then I suggest several approaches to low-cost research. The “Big Decision” Myth Too often, marketing research is deemed necessary only for decisions involving large financial stakes and in such cases should always be carried out. But research should be viewed from a cost-benefit perspective. Its costs are usually of two types—the expenses for the research itself and the amount of lost sales and lost competitive advantage caused by delaying a decision until the results are in. The benefits result from improving the quality of decisions under consideration. Any improvement, in turn, is a function of the stakes involved and how uncertain you are about the rightness of